Investment house Active Capital Company has together with the firm’s management taken a majority stake in Codi Group, a Netherlands based manufacturer of wet wipe products.

With a revenue of around €60 million, realised by a team of 180 professionals, Codi Group is one of the larger players in Northern Europe that specialises in baby cleaning products and wet wipe products for other applications. The company, based in Veenendaal, the Netherlands, provides its products to large FMCG brands such as Beiersdorf, retailers such as Hema and Rituals, and supermarket concerns as Ahold Delhaize.

In recent years Codi Group has seen rapid growth, building on a strategy of both autonomous growth and inorganic expansion via the acquisition of Venray (Netherlands) based Incare in 2014. Last month the firm’s management unveiled that they have set their sights on further expansion, which includes an accelerated growth path, and, as part of the plans, they have attracted financial capital from Active Capital Company (ACC). The Amsterdam based private equity firm, which operates in the company turnover segment of between €10 to €80 million, purchased a majority stake in Codi Group from Value Enhancement Partners, another institutional investor which owned Codi Group since 2013.

Financial terms have not been disclosed, analysts however estimate deal value to hover somewhere between €10 million and €20 million. Codi last year booked an EBITDA (an important determinant for company valuations) of a few million euro’s – manufacturers with similar sizes are typically picked up for a factor of 6x to 7x EBIDTA.

Accelerated expansion

With the added financial muscle, Codi Group aims at ramping up its footprint, with a top 3 position in terms of market share set as the mid-term objective. “Over the last years Codi has successfully focused on internal optimisation and broadening our customer base to create a solid platform for future growth. We are very happy to step-up our growth initiatives and realise our ambitious strategy”, says CEO Erik van Deursen. To support the plans, three pillars have been earmarked within the new strategy: Sustainability, Consumer Insights and Technological Innovation.

Mels Huige, a partner at Active Capital Company, highlights that the firm aims at growing its turnover to the €100 million mark, through both autonomous growth and bolt-ons. Enhancing Codi Group’s operations is one part of the puzzle, according to Huige, citing machine capacity as a key priority. At Codi’s production facilities in Veenendaal and Venray nonwovens are converted into various high-end products with flexible and innovative packaging options. “With existing facilities, there still is room to produce more”, said the investor.

Another area of the expansion plans focuses on diversification. The firm is exploring avenues to apply its manufacturing process and product in other markets, such as the cleansing of glass, shoes or car seats. Victor Schols, Investment Director at ACC, adds: “We are happy to support Codi in achieving its goal to becoming a top 3 player in Europe. We look forward to working with the team and accelerating the strategy.”

M&A Advisors

The transaction between the parties was advised on by M&A experts from six firms. Seller Value Enhancement Partners and the management of Codi received corporate finance services from IMAP, while legal M&A advisory was provided by AKD. Acquirer Active Capital Company hired Fortaleza Capital to provide financial advisory services, with Accuracy tapped to facilitate the financial due diligence process. Legal advice and support was delivered by Houthoff Buruma and tax / fiscal expertise was provided by local Dutch firm Boon.